JPMorgan Analysts Sees $94,000 Bitcoin Estimate Production Costs

There has been a notable rise in the production cost of flagship cryptocurrency Bitcoin (BTC). According to an estimate quoted by JPMorgan analysts, the figure has spiked to a total of $94,000, marking a 2.17% spike from the former estimate of $92,000. It is worth noting that this figure has always acted as a floor or support price.

Bitcoin Mining Difficulty Contributes to Increased Production Costs

In a Wednesday report, JPMorgan analysts led by managing director Nikolaos Panigirtzoglou, noted that Bitcoin production cost is now estimated to reach approximately $94,000. Recently, this estimate was about $92,000, making the current value a 2.17% increase from here. The analysts noted Bitcoin’s downside from current levels appears to be “very limited.” 

Bitcoin mining difficulty, which is the amount of computing power required to mine the same number of blocks, has been on a steady increase. In August, it reported that this metric climbed to an All-time High (ATH) of 127.6 trillion. JPMorgan analysts explained that this consistent rise over the month has contributed to the spike in Bitcoin’s estimated production costs

Bitcoin Key Metrics Shows Mixed Signals

There is also the conversation of the ratio of bitcoin’s price to its production cost. According to CoinMarketCap data, BTC price is currently at $98,347.59, marking a 3% dip within the last 24 hours. At this level, the ratio of bitcoin’s price to its production cost is just a little above 1.0, near the low end of its historical range, per JPMorgan’s analysis. 

Bitcoin’s market capitalization is roughly $1.96 trillion with some losses. On the other hand, Bitcoin’s 24-hour trading volume is in the green zone. It has now increased by 47.45% to rest at $93.71 billion. 

Outlook and Price Prediction for Bitcoin

Currently, Bitcoin is a far-cry from its ATH above $126,000 but JPMorgan analysts believe that it still has potentials to rise to about $170,000 in the next 6 to 12 months. Their prediction came from a comparison of Bitcoin and gold, taking into account Bitcoin’s price fluctuations. They think that the coin still has a lot of growth potential in the current market.

Explicitly, these JPMorgan analysts believe strongly that the worst is over for the flagship crypto. This was after October 10 saw crypto liquidations top $19 billion from BTC, ETH and several other digital assets.

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